The Bank of Japan (BOJ) decided on Friday to maintain its ultralow interest rate policy as it concluded its two-day policy-setting meeting, holding the view that it requires time to achieve its 2 percent inflation target.
The central bank will keep its short-term benchmark interest rates at minus 0.1 percent, while continuing to guide 10-year Japanese government bond yields to around zero percent within the range of plus and minus 0.5 percentage points.
The BOJ added that it will continue to purchase 10-year bonds at a fixed rate of 0.5 percent every business day in principle, keeping up its fight to defend the yield cap to keep borrowing costs extremely low and support the economy.
The BOJ said in a statement it will “patiently” continue with monetary easing in order to achieve its target of 2 percent inflation accompanied by wage increases “in a sustainable and stable manner.”
BOJ Governor Kazuo Ueda has stressed the need to stick to monetary easing based on the central bank’s projections that inflation will slow down later this year and that its 2 percent target will not likely be achieved stably.
